[Exclusive] Overseas Real Estate Acquisition Remittance Amount Halved in Q2 This Year Due to COVID-19

Overseas Real Estate Acquisition Remittance Amount $69.8 Million... 51.2% Decrease YoY
Remittance Amounts Highest to the US, Canada, and Vietnam

[Asia Economy Reporter Jang Sehee] The market for remittances related to overseas real estate has shrunk due to the novel coronavirus infection (COVID-19). This is because lockdown measures were implemented worldwide as COVID-19 spread.

According to the 'Status of Remittances for Overseas Real Estate Acquisition by Domestic Residents' submitted by the Bank of Korea to Choo Kyung-ho of the People Power Party, a member of the National Assembly's Planning and Finance Committee, the amount of remittances for overseas real estate acquisition by domestic residents in the second quarter of this year was $69.8 million, a 51.2% decrease compared to the same period last year.

Over the past three years, $140 million was remitted each quarter, but this year, due to the impact of COVID-19, the remittance amount in the second quarter sharply declined. The Bank of Korea analyzed that the spread of COVID-19 caused a decrease in remittances for overseas real estate investment by domestic residents.

This is because students and workers who used to go abroad did not purchase real estate for residential purposes due to lockdowns implemented worldwide.

By year, the remittance amount for overseas real estate acquisition by domestic residents showed an increasing trend, from $308.9 million in 2016 to $476.9 million in 2017, $625.8 million in 2018, and $579 million in 2019.

However, in the third quarter of this year, the remittance amount for overseas real estate acquisition by domestic residents was $80.2 million, slightly higher than the second quarter ($69.8 million).

By major countries, the United States was the highest at $51.8 million, followed by Canada at $7.5 million, Vietnam at $5.4 million, the Philippines at $2.6 million, and the United Kingdom at $2.3 million.

Regarding this, Professor Kim Sang-bong of Hansung University’s Department of Economics said, "Because of COVID-19, people could neither see houses in person nor go abroad to reside, so remittances for overseas real estate investment decreased," adding, "There is still demand for residential purposes, but some portion has returned to the domestic market."

Meanwhile, the government abolished the remittance limit of $200,000 for contract deposits related to overseas real estate acquisition, which caused inconvenience when purchasing overseas assets, in March last year. Additionally, the overseas remittance limit without requiring proof of transaction reason was relaxed from $3,000 to $5,000 per transaction.

This content was produced with the assistance of AI translation services.